Business proposal for opening a new Apple store in Chile Research

Business for opening a new Apple store in Chile - Research Proposal Example According to Organization for Economic Co-operation and Development (OECD) report published in 2012, Chile depends heavily on its exports of metals and the business environment faces lack of competitive pressure which can bring innovation. The report has also pointed out that domestic companies in the country adopt innovation by importing technologies. However, according to report published by Budde Comm Research Company in 2012, penetration of mobile phone market is highest in Chile in comparison to other Latin American countries such as Peru, Brazil etc. Budde Comm (2012) has also identified three major players in Chilean mobile market such as Telefà ³nica’s Movistar, Amà ©rica Mà ³vil’s Claro and Almendral’s Entel. However, these companies can be identified as telecom connection providers. Therefore, Apple will not face direct competition from these above mentioned telecom operators, but it is advisable to decision makers to select a network service provide r partner prior to opening shop in Chile. Subtel is the telecom regulator in Chile which has recently auctioned 2.5 to 4 GHz band among telecom operators, so Apple can enter the Chilean mobile market by offering Smartphone equipped with 43G network. Although currently there is an Apple store in Chile, Apple does not export its Smartphone to local retailers. According to Heim (2011), Apple has never tried to open online shop or retail store in Chile because the company has never perceived Chilean mobile market as an important one. Heim (2011) has reported that local retailers sell Apple iPhone in the price range of $750 to $1750, while they export it at 10% to 15% lower price. Central Intelligence Agency (2012) has reported that per-capita income of Chilean people is $18,400 which is more than per capita income of Brazil, Peru and other important countries of Latin America. Hence, there are opportunities for opening Apple store in Chile which will offer highly priced Smartphone to cu stomers. Next section of the study will discuss the competitive environment of Chilean mobile phone market. Competitive Environment According to Petrazzini and Hilbert (2002), Nokia is the market leader in Chile but recent study has shown that market position of Nokia has been perturbed the rise of demand for Smartphones by Apple and Samsung. According to the OECD (2012) report, lack of administrative and legal proceeding has created challenge for foreign companies to enter the Chile market. Regional problems like counterfeits of patent, lack of infrastructure to support the road transport based logistics, irregular government policy regarding foreign investment, political tension between parties will definitely create problems for Apple while opening stores in Chile. However, in 2011, Chillean government established Fondo Capital Abe program in order to ease the credit facility to entrepreneurs and foreign companies. Apart from this, there Apple needs to use the guideline mentioned by Subtel in order to find the suitable carrier. However, the mobile manufacturing industry is fragmented, and competitive pressure will be low for Apple. In Chile, Samsung and Nokia will be two major competitors for Apple. Euro Monitor International (2012) has reported that Samsung is the market leader in general mobile phone market with 32% of retail market penetration but when it comes to Smartphone sales, Apple’s iPhone is the market leader with 29% market share. In Chilean mobile phone market, major competitors for Apple will be Samsung, Nokia and Research in Motion. Hence, it can be recommended that Apple should export its Smartphone to Chile as a short term strategy to penetrate. Then it should think about establishment of its own retail store backed by research